Value Engineering 2005: Best Practices Take Center Stage

Value engineering (VE) best practices and lessons learned took center stage during the biennial 2005 VE Conference, held from July 20-22, 2005, in San Antonio, Texas. Sponsored by the American Association of State Highway and Transportation Officials (AASHTO), Federal Highway Administration (FHWA), and the Texas Department of Transportation (TxDOT), the 3-day conference featured new ideas, methods, and case studies for experienced practitioners, as well as the basic foundation for those just starting to use VE.

"Our objective is to reach out to the States and other public organizations and provide guidance on how to run their VE programs," says Ken Smith of the Washington State Department of Transportation (WSDOT) and outgoing chair of the AASHTO VE Technical Committee. According to Smith, 120 of the 160 participants were first-time attendees at the conference. Approximately 40 different States were represented, as well as Canada, Puerto Rico, and Greece.

VE is a process that reexamines a transportation project's design plan, so as to improve the design's safety, quality, and functionality, while also reducing the cost. The VE process can also shorten project times, encourage innovation, lower life-cycle costs, and improve quality. A 1995 congressional regulation mandates the use of VE on all Federal-aid highway projects of $25 million or more. Prior to 1995, VE was done on a voluntary basis. In fiscal year 2004, 324 VE studies were conducted by transportation departments nationwide, resulting in savings of more than $1.4 billion.

Conference sessions featured three tracks. The first track, case studies, presented examples demonstrating how VE has been used on specific projects. The second, VE programs, included presentations on how State transportation agencies are managing their VE programs, and looked at how VE can be used with such strategies as design-build and context sensitive solutions. The advanced tools and techniques track, meanwhile, looked at how VE can be a valuable tool for project management, risk assessment, and other processes, and provided details on such topics as selecting VE teams.

According to conference chair Susan McClain of TxDOT, two case studies in particular generated great interest from conference attendees. The first study, presented by the Louisiana Department of Transportation and Development (LA DOTD), proposed improvements to U.S. 190, a route linking suburban St. Tammany Parish, Louisiana, to the New Orleans metro area. The $40.4 million project will include work on two different bridges, various intersections, pavements, driveways, and a bike tunnel. A VE study recommended utilizing shorter bridge spans and revising plans for some of the intersections, among other improvements. "The VE team came up with 10 solid recommendations that were all implemented, reflecting $11.4 million in savings," says Richard Savoie of LA DOTD.

The second case study looked at the proposed reconstruction and widening of 11 km (7 mi) of I-94 through downtown Detroit. According to Win Stebbins of the Michigan Department of Transportation (MDOT), the project proposes expanding the 1950s-era highway to eight lanes, including adding a two-lane service road on both sides of the highway. The expansion would fall nearly within the existing right-of-way. The VE study reduced the $800 million construction budget by a net $20 million. This takes into account $80 million in recommended savings, including such measures as shortening pedestrian bridges to only span the freeway and eliminating the use of temporary steel sheeting, and $60 million in recommended additional spending on such measures as improving geometrics and drainage and estimating more accurately the cost of retaining walls. "The VE study confirmed the concept and cost, and showed us how to spend wiser," says Stebbins.

The conference also featured the presentation of the FHWA and AASHTO awards for VE achievements during the past 2 years. The 2005 FHWA Awards for Outstanding Achievement in Value Engineering recognized the overall effectiveness and efficiency of State transportation departments' VE programs. Utah won for Category I programs totaling up to $49 million; West Virginia was honored in Category II for programs ranging from $50 million to $99 million; Louisiana won for Category III programs ranging from $100 to $499 million; and California was recognized for Category IV programs totaling $500 million or more (see sidebar, page 2). The AASHTO awards categories included Improved Process, Project Delivery, Construction, and Pre-Construction Engineering (see sidebar, this page).

The next VE conference will be held in Seattle, Washington, in 2007.

For more information on the conference, contact Ken Smith at WSDOT, 360-705-7233 (email: smithk@wsdot.wa.gov), or Susan McClain at TxDOT, 903-799-1311 (email: smcclain@dot.state.tx.us). Information is also available on the conference Web site at tti.tamu.edu/conferences/vec. To learn more about the Louisiana VE study, contact Richard Savoie at LA DOTD, 225-379-1384 (email: rsavoie@dotd.louisiana.gov). For details on Michigan's I-94 study, contact Win Stebbins at MDOT, 517-373-2246 (email: stebbinsw@michigan.gov). For more information on VE in general, contact Donald Jackson at FHWA, 202-366-4630 (email: donald.jackson@fhwa.dot.gov).

FHWA VE Outstanding Achievement Awards

The 2005 FHWA Awards for Outstanding Achievement in Value Engineering (VE) were presented to California, Utah, Louisiana, and West Virginia at the July 2005 VE Conference in San Antonio, Texas. The awards were based on how effectively and efficiently each of the State transportation departments operated their VE program. The California Department of Transportation (Caltrans) began conducting VE studies in 1969, and since 2000 has saved a total of $630 million from 139 VE studies performed. Caltrans is now developing a new seminar to assist State practitioners in using VE more often and to improve VE reporting to FHWA.

The West Virginia Department of Transportation's VE program began in the late 1980s. Recent accomplishments include publishing a VE Manual and Design Directive in 2004 to promote VE awareness and use of VE principles.

The Utah Department of Transportation conducted eight VE studies in fiscal year (FY) 2004 that resulted in savings of more than $11.6 million. Since Utah began using VE in 1989, the State has saved more than $305 million in design costs.

After holding VE training sessions in 1991 and 1997, the Louisiana Department of Transportation and Development (LA DOTD) formalized its VE program in 2004. Five VE studies were conducted in FY 2004 that yielded $29.4 million in savings. LA DOTD plans to hire a VE staff person this year to perform VE studies, cost estimation, and risk management, and to update the department's engineering directive to add VE requirements for the planning and environmental stages of projects. VE is already required for the design stage.

For more information on the FHWA VE awards, contact Donald Jackson at FHWA, 202-366-4630 (email: donald.jackson@fhwa.dot.gov).

AASHTO National VE Awards

Improved Process - The California Department of Transportation (Caltrans) was honored for its program to reduce daily trash levels caused by stormwater runoff in the Los Angeles River. The 10-year program aims to reduce trash discharge by 10 percent each year until a zero discharge level is achieved. Caltrans' value-added proposals will expedite program implementation and improve worker safety. Receiving an Honorable Mention was the Ontario (Canada) Ministry of Transportation (MTO) for its work to reduce claims related to rock quantity overruns/underruns on construction contracts.

Project Delivery - The Florida Department of Transportation was recognized for its efforts to reduce construction time for the I-595 Corridor Project in Broward County and minimize right-of-way and environmental impacts, which will improve constructibility and cut costs by hundreds of millions of dollars.

Construction - The Ontario MTO was honored for its proposals to reduce construction costs for an interchange near Ottawa, Ontario. The interchange was to be constructed on leda clay, which is susceptible to liquefaction when loaded. The planned lightweight fill design was replaced with a less expensive design of locally available rock fill with vertical wick drains and a thicker surface drainage layer. The change resulted in savings of nearly $4.9 million.

Pre-Construction Engineering (Under $10 million) - The Texas Department of Transportation was recognized for its VE study of the Peter Whetstone Square Enhancement Project in Marshall, Texas, which was running about 40 percent over budget. Changes made to complete the project within the scheduled timeframe and budget included using innovative landscaping features and reworking elements geared to meeting the requirements of the Americans with Disabilities Act.

$10 million to $25 million - The New Jersey Department of Transportation was honored for its proposed Route 46 over Overpeck Creek bridge project. The VE study recommended using prefabricated superstructure units, moveable barriers, and an accelerated "hyperbuild" strategy. As a result, the budget was reduced from $15 million to $9 million and the project schedule shortened from 18 months to 6 months.

$25 million to $75 million - The Washington State Department of Transportation's VE study of the proposed expansion of the I-405 corridor looked at the most effective ways to treat and control stormwater runoff. The study recommended using more environmentally sustainable solutions, such as infiltration systems in place of stormwater vaults, that will result in more than $62 million in cost savings.

Over $75 million - The VE recommendations for the Michigan Department of Transportation's reconstruction and widening of I-94 through downtown Detroit will produce a net $20 million in savings. The recommended savings include shortening pedestrian bridges, while additional spending was recommended for such elements as improving geometrics and drainage.